Technology · Tax
Startup Tax & R&D Credits
Payroll tax offset, Delaware franchise tax and founder equity, handled by a senior CPA.

Startup tax

Startup tax and R&D credits: payroll tax offset, Delaware franchise tax and founder equity

Greywood CPA handles tax for startups and software companies: federal and state returns, research credits, Delaware franchise tax and the founder and employee equity issues that cost the most when missed. Every return is prepared and reviewed by a senior CPA.

Qualified small businesses, generally those with under $5 million in gross receipts and no gross receipts more than five years back, can apply up to $500,000 a year of the federal research credit against payroll taxes, so even pre-revenue startups can get cash back. Federal rules for deducting research costs changed in 2025, and we apply the current rules each year.

Last reviewed: November 2026

The research credit and the payroll tax offset

Software development often qualifies for the federal research credit: engineers' wages, contractor costs and cloud costs for development and testing can count. For qualified small businesses, up to $500,000 a year of the credit can offset the employer's payroll taxes, starting the quarter after the return is filed. That makes the credit valuable even before you have taxable income.

  • Elect the payroll offset on a timely filed original return
  • Document projects, technical uncertainty and experimentation
  • Track engineering time by project
  • Check state research credits too

Delaware franchise tax: don't pay the scary number

Delaware corporations with many authorized shares can get a franchise tax notice for a very large amount calculated under the authorized shares method. Recalculating under the assumed par value capital method, using your assets and issued shares, usually cuts it dramatically. The annual report and tax are due March 1.

Founder and employee equity

  • 83(b) elections: filed within 30 days of receiving restricted stock, or the chance is lost
  • Qualified small business stock (QSBS): can exclude a large part of the gain on sale for eligible C corporation stock held long enough; the rules were expanded in 2025 for newer stock
  • ISOs vs. NSOs: different tax results for employees on exercise and sale
  • 409A valuations to set option strike prices

Remote employees and multi-state filing

Hiring remotely can create payroll registration, withholding and income tax filing obligations in each state where employees work. We map your obligations and keep registrations current as you hire.

A startup tax calendar

DateWhat's due
March 1Delaware annual report and franchise tax
April 15Form 1120 for calendar-year C corporations (extension to October 15)
QuarterlyPayroll filings, where the R&D payroll offset is applied
Within 30 days of grant83(b) elections for restricted stock

Why startups choose Greywood CPA

  • Fixed fee, agreed first. No hourly billing and no surprise invoices.
  • Senior people on your file. Every engagement is led by a senior professional and signed off by a CPA partner. Meet the team.
  • Licensed and registered. Virginia Board of Accountancy firm license #134961, AICPA member, with out-of-state registrations where required. See our credentials.

Related

Startup tax and R&D credit FAQs

Can a pre-revenue startup benefit from the R&D credit?

Yes. Qualified small businesses, generally with under $5 million in gross receipts and none more than five years back, can apply up to $500,000 a year of the credit against payroll taxes.

Why did we get a huge Delaware franchise tax bill?

Delaware defaults to the authorized shares method, which can produce a very large number for startups with many authorized shares. Recalculating under the assumed par value capital method usually reduces it significantly.

When is an 83(b) election due?

Within 30 days after receiving restricted stock. Missing the deadline generally can't be fixed.

What is QSBS?

Qualified small business stock: eligible stock in a C corporation that, if held long enough, can let shareholders exclude a large part of the gain on sale. The rules were expanded in 2025 for stock issued after that change.

How do your fees work?

We quote one fixed fee in writing before any work starts, based on entities, states and whether a research credit study is included.

Leaving R&D credits on the table?

Tell us about your team and spend. A senior CPA will send a fixed-fee proposal within 1–3 business days.